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PROJECT EVALUATION REVIEW TECHNIQUE (PERT)

AND CRITICAL PATH METHOD (CPM)


Project Evaluation Review Technique and Critical Path
Method (CPM) are scheduling techniques used to plan, schedule,
budget and control the many activities associated with projects.
Projects are usually very large, complex, custom products that
consist of many interrelated activities to be performed either
concurrently or sequentially. The planning horizon for PERT/CPM
typically extends beyond the six-month time frame of traditional
short-range planning used in the other production processes.
Utilizing PERT/CPM involves breaking the total project down into
many different individual activities with identifiable time
requirements. Each activity must be accomplished as part of the
total work to be done.
Custom products (made to customer specification) are
produced with a project process; therefore, the customer's
desired completion date is the focal point for scheduling. The
time to begin work on the project is determined by working
backward from the customers desired completion date. Project
managers must coordinate each of the activities so the project
can be completed at the desired date and with minimal costs.
The PERT/CPM schedule allows for converting the project plans
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into an operating timetable; thus, provides direction for
managing the day-to-day activities of projects.
Although application of both PERT and CPM follow the same
steps and use network diagrams to schedule and control projects,
the primary difference between these two techniques is that PERT
is probabilistic where CPM is deterministic. The terms PERT and
CPM will be used together or interchangeably in this paper to
present the basic principles behind the application of these
techniques. In addition, deterministic activity times in this
paper will be used to illustrate the techniques.

A SIMPLE EXAMPLE
A simple exercise (scheduling a student's morning) is used
here to illustrate the principles of applying PERT/CPM to a set
of interrelated activities. A student has several activities
that must be performed either simultaneously or sequentially
before he/she attends a 9:30 class. The activities have been
identified as individual activities to be done prior to
attending class. The desired completion time for these
activities is 9:30, otherwise the student will be late for
class. A list of activities that must be performed prior to
class and the time required to do the activities are as follows:

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# Activity Time Required
A. Wake-up & get out of bed = 10 minutes
B. Shower = 10 minutes
C. Dress = 10 minutes
D. Prepare Breakfast = 20 minutes
E. Eat Breakfast = 15 minutes
F. Brush Teeth = 5 minutes
G. Transportation to Class = 40 minutes

Assuming these tasks must be performed sequentially
according to the activity number presented in the list, a
network diagram illustrating the relationships among the
activities can be developed (see Figure 1).



10

10

10

20

15

5

40

A B C D E F G




FIGURE 1 ACTIVITIES PRIOR TO 9:30 CLASS


If the student scheduling the activities begins at some
point in time (zero) and moves through the path of activities in
sequence (in this example there is only one path; however,
complex projects may have hundreds of paths), the student will
find that the shortest time required to complete all the
activities prior to class is:

10 + 10 + 10 + 20 + 15 + 5 + 40 = 110 minutes
1 2
3 4 5 6 7 8
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Since these activities take 110 minutes to complete, the student
must begin the first activity at 7:20 in order to arrive at the
9:30 class on time. Each activity's start and end times can be
determined and then used by the student to control his/her on-
time arrival for the 9:30 class.
PERT/CPM requires a network diagram of all the activities
graphically interrelated showing the precedence relationships of
the activities. Arrows in the network presented in Figure 1
represent the activities to be accomplished. An activity in a
PERT/CPM network consumes resources and/or time and can be
referred to by their endpoints and/or a letter assigned to the
arrow. An event is a point in time, a milestone in the total
work to be accomplished; it marks the beginning and end of an
activity. Events do not consume resources or time and are
numbered with those at the tail of the activity having lower
numbers than the events at the head of each activity arrow (left
to right). Events are represented by circles (nodes) and
networks begin with one node and end with one node.
Precedence relationships must be defined in order to
determine the sequence of activities in the network e.g., some
activities cannot begin until others have been completed. In
Figure 1, the second activity cannot be done until the first
activity has been completed.


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10

10

A B
indicates activity A cannot begin before
activity B is completed. Event #1 (node # 1) indicates a point
in time and marks the beginning of activity A. Event #2 (node
#2) indicates a point in time and marks the end of activity A
and the beginning of activity B. A path through the network is
a unique set of activities that leads from the starting node to
the finishing node. The longest path (amount of time) through
the network, from start to finish, is the critical path. The
project cannot be completed sooner than the time required for
completing the activities in the critical path. In Figure 1,
the critical path is equal to 110 minutes and the sequence of
activities cannot be completed sooner than 110 minutes.

STEPS INVOLVED IN PERT/CPM
There are six steps involved in PERT/CPM that should be
completed in chronological order:
1. Identify activities required by the project.

2. Identify the precedence relationships among the activities.

3. Determine the expected time requirements for each activity.

4. Develop a network diagram of activities (arrows) and events
or nodes (circles) showing precedence relationships.

5. Determine the earliest and latest feasible event times.

6. Identify the critical path (the minimum time to complete
the project).

1 2
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Take the following network and activities (in weeks):








F
5










FIGURE 2 EXAMPLE NETWORK

A path is a unique set of connected tasks or activities
from beginning to end of the network. The length of each path
is determined by adding the activity times on the path. In the
above network A
2
indicates A activity takes two weeks. Often,
these paths have some activities in common with each other.
The following list indicates each unique path and the length of
each path through the example network (Figure 2):

Path A-D-G-H Length = 15
Path A-F-H Length = 11
Path B-C-D-G-H Length = 20
Path B-C-F-H Length = 16
Path B-E-H Length = 15

E
8
C
4
2
3
A
2

B
3

D
3
H
4

G
6
4
5 6
1
7
The critical path is defined as the longest path through
the network. Path B-C-D-G-H has a length of 20 weeks, (3 + 4 +
3 + 6 + 4) making it the longest path through the network. The
critical path can be shown with double arrows along the
activities on the critical path.







C
4









FIGURE 3 CRITICAL PATH


The slack associated with each path can be determined by
the difference between that paths length and the longest paths
length. For example, path A-F-H is the shortest path at 11
weeks. This path has a total slack of 9 weeks that is the
difference between the length of the critical path (B-C-D-G-H)
and the length of Path A-F-H (20 - 11 = 9). The slack
associated with each activity is determined by using a forward
pass and backward pass. A forward pass is used to find the
earliest event times. The forward pass involves tracing each
2
3
A
2

B
3

D
3
E
8
H
4

G
6
4
5
6
1
F
5
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path forward through the network and cumulatively adding the
activity times according to a specified procedure. Because the
required start date for the project is initially unknown, the
forward pass begins with a time of zero.

FORWARD PASS
In a process called the "forward pass", the PERT/CPM
project manager can determine the "earliest event times" (for
definitions of earliest start and finish times see the PERT/CPM
terminology section) for each activity. The forward pass
involves tracing each path forward through the network and
cumulatively adding the activity times according to a specified
procedure. The cumulative adding of the activity times provides
the scheduler with earliest start and finish times for each
activity, and the total length of time required for completing
the project or the project duration. Since the required start
date for the project is initially unknown, the forward pass
begins with a time of zero.
PATH A D. The earliest start time (ES) for activity A is
time zero (0) and the earliest finish time (EF) is equal to the
earliest start time plus the activity time or EF = ES + t
or 2 = 0 + 2. Since activity D can not begin until both
activity A and C are completed then the forward pass must go
back to the beginning node and follow the path through B
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C to determine earliest finish time for activity C.
PATH B C. The earliest start time (ES) for activity B is
0 and the earliest finish time (EF) for activity B is 3 (EF = ES
+ t or 3 = 0 + 3). The earliest start time for activity C =
the earliest finish time for activity B or 3. The earliest
finish time for C is 7 (7 = 3 + 4). When two arrows go into
node 3 then the earliest start time (ES) for the following
activity D is the larger of the two earliest finish times for
activities A and C or 7 (7 > 2). This same process is used
throughout the forward pass to determine the earliest event
times as shown in Figure 4.






















FIGURE 4 FORWARD PASS


E
8
C
4
2
3
A
2

B
3

D
3
H
4

G
6
4
5 6
1
F
5
3 | 11
7 | 10
0 | 3
3 | 7
7 | 12
10 | 16
16 | 20
0 | 2
ES | EF
3
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BACKWARD PASS
In a process called the "backward pass", the PERT/CPM
project manager determines the "latest event times" (for
definitions of latest start and finish times see the PERT/CPM
terminology section) for each activity. The backward pass
involves tracing each path backward through the network and
subtracting activity times according to a specified procedure.
Because the duration of the project (20 in this example was
determined in the forward pass), the backward pass begins with
the project duration time determined in the forward pass.
PATH H G. Since we want to minimize the costs associated
with completing the project, the earliest finish time (EF = 20)
for activity H becomes the latest finish time (LF) for H. The
latest finish time for activity H is the latest activity H can
finish and not delay the project. Starting with 20 and working
through the network backward, we can determine the latest start
time for activity H subtracting the activity time (4) for H from
the latest finish time or LS = LF - t or 16 = 20 + 4. Activity
G must be completed by week 16 or activity H becomes delayed.
PATH G D. The latest finish time (LF) for G is 16.
Therefore, the latest start time for G is 10 (16 6). The
latest start time (LS) for G is equal to the latest finish time
(LF) for D (10). The latest start time (LS) for D is 7 (7 = 10
3). When two arrows come out of node (node 3), the backward
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pass cannot be completed until the latest start times for all
arrows coming out of the node are determined. Therefore, to
continue the backward pass, the latest event times for activity
F must be determined. The latest finish time (LF) for F is 16
and the latest start time for F is 11 (16-5). Then, to continue
the backward pass through activities A and C, the latest finish
time for activities A and C is the larger of the two latest
start times for activities D and F or 11 (11 > 7). This same
process is used throughout the backward pass to determine the
latest event times as shown in Figure 5.






















FIGURE 5 BACKWARD PASS


C
4
H
4
E
8
2
3
A
2

B
3

G
6
4
5 6
1
8 | 16
7 | 10
0 | 3
3 | 7
11 | 16
10 | 16
5 | 7
16 | 20
F
5
LS | LF
D
3
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Knowledge of these earliest and latest times allows the
project scheduler to identify any slack time associated with the
activities, thus the project manager can allocate resources in
the most effective manner. If resources need to be shifted from
one activity to another with consideration for project
completion, the event times provide information to effectively
allocate these resources. The efforts of a project manager
using PERT are directed at scheduling each of the activities and
controlling each of the activities according to the PERT plan.
The activities on the critical path have zero slack, thus
emphasis is placed on monitoring those activities on the
critical path.

SLACK
Once the event times have been determined then the activity
slack can be determined. Activity slack is defined as the
difference between the late start (LS) and early start (ES)
times for an activity. Numerically, (LS ES) = activity slack.
Also, the difference between the late finish (LF) and the early
finish (EF) times also indicates the amount of slack for an
activity. Numerically, (LF - EF) = activity slack. Table 1
shows the resulting event times for each of the activities.


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TABLE 1 EVENT TIMES AND SLACK


Activity LS ES LF EF Slack

A 5 0 7 2 5
B 0 0 3 3 0
C 3 3 7 7 0
D 7 7 10 10 0
E 8 3 16 11 5
F 11 7 16 12 4
G 10 10 16 16 0
H 16 16 20 20 0



During the planning phase of a project, planners often
develop budgets for each task and sub-task of the project. When
these budgets are aggregated, we arrive at the budget for the
project. Besides managing time, project managers must monitor
budget expenditures throughout the project. As the project
progresses through time, the graphical depiction of the network
must change to reflect the progress being made on the project.
Project managers usually hold regular meetings to determine the
status of a projects implementation with regular updating of
the PERT network required (or updating of whatever project
management tool is being used).


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PERT/CPM TERMINOLOGY
(ACTIVITY-ON-ARROW - AOA)

ACTIVITY - Activity or task to be accomplished as part of the
total work to be done. Activities consume resources and/or
time. They can be identified with starting and ending points.
The network activities are represented by arrows and can be
referred to by their endpoints and/or a letter assigned to the
arrow.


EVENT - An event is a point in time, a milestone in the total
work to be accomplished. It marks the beginning and end of an
activity. Events do not consume resources or time. Events are
numbered with those at the tail of the activity having lower
numbers than the events at the head of each activity arrow (left
to right). Events are represented by circles (nodes).


PRECEDENCE RELATIONSHIPS - Some activities can not begin until
others have been completed. For example, a contractor cannot
lay cement blocks until the foundation has been poured and
cured. The foundation cannot be poured until the soil has been
excavated and forms have been built. Precedence relationships
must be defined in order to determine the sequence of activities
in the network.


NETWORK - The set of all project activities graphically
interrelated through precedence relationships. Networks should
begin with one node and end with one node.


SLACK - The amount of play in the system. The slack associated
with any path is simply the difference between the time required
for the critical path and the time required for the given path.
The amount of slack associated with each activity indicates the
length of time an activity can be delayed without affecting the
completion date for the entire project. The amount of slack for
each activity is computed as follows:

Slack = LS - ES or LF - EF


PATH - A sequence of activities that leads from the starting
node to the finishing node.


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CRITICAL PATH - The longest path through the network. The
critical path is the minimum time for expected completion of the
entire project. The amount of slack associated with the
critical path is zero. Each of the activities on the critical
path has zero slack. A network can have more than one critical
path.


EARLIEST START TIME (ES) - The earliest time an activity can
start, assuming all preceding activities start as early as
possible.


EARLIEST FINISH TIME (EF) - The earliest time an activity can
finish.

EF = ES + t


LATEST START TIME (LS) - The latest time an activity can start
and not delay the project.

LS = LF - t


LATEST FINISH TIME (LF) - The latest time an activity can finish
and not delay the project.


DUMMY - Dummy activities are not real activities and thus will
not actually be performed during the project. A dummy activity
has a time of zero. They are used primarily to maintain the
precedence relationships required in the network.


CRASHING - Crashing involves reducing the overall time required
to complete the project. This involves trading off costs of
additional resources against the value of time saved to complete
the project. Crashing is used with activities on the critical
path.